External Meetings: Meeting with Cargill representatives

Cargill representatives discussed the pending position limits rule, including issues concerning anticipatory hedging.  They explained that by the nature of their business they often made firm bids and offers, and they gave reasons why these offers were in the nature of hedging and risk management of physical supplies.  Such irrevocable offers should not count against any speculative limit, for they do carry risk and can and should be hedged.  Otherwise, Cargill be competitively disadvantaged compared to others for spec limit purposes, given that their business model requires that they issue such firm bids and offers linked to Cargill’s physical business.  They discussed the possibility of providing a specific example or examples in a forthcoming comment letter, to make this point clearly and expressly.